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Traders attracted back to the dollar

It tested the recent lows against the Euro as news of troubled Eastern European banks weighed on the single currency. 

The Euro was also hampered by lower than expected ZEW number which came in at -86 against the predicted -77. Cable traded in relatively orderly fashion which enabled Sterling/Euro to edge up during the day.

UK CPI data beat expectations by coming in at 3.0% versus analysts 2.6% prediction which also assisted Sterling strength.

The Yen still remained reasonably strong although it did lose ground against the US dollar as that seems now to be the preferred safe haven. This morning Sterling could be in focus as we have the CBI orders and minutes of the last MPC meeting due.

This afternoon in the US we have some housing numbers followed by Industrial output data and the minutes of the last FOMC meeting due after which Mr Bernanke will be speaking.   Sterling/Euro traded with a high of 1.1325 low of 1.1255 and currently 1.1262 , Sterling/US a high of 1.43 low of 1.4195 and currently 1.14205 and Euro /US a high of 1.2640low of 1.2570 and currently 1.2620.